A process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions – assessed in terms of their extensity, intensity, velocity, and impact – generating transcontinental or interregional flows and networks of activity, interaction, and the exercise of power
Industry definition A group of firms producing products that are close substitutes for each other Porter
How big is the profit and who is after it? vs Profit Profit
Five forces of competition SUPPLIERS POTENTIAL ENTRANTS SUBSTITUTES BUYERS INDUSTRY COMPETITORS Rivalry among existing firms Bargaining power of suppliers Bargaining power of buyers Threat of new entrants Threat of substitutes Porter
Management Systems Organization Structure ORGANIZATIONAL CAPABILITIES
Capacity for communication & collaboration
Functional classification of organizational capabilities FUNCTION CAPABILITY EXAMPLES Corporate Financial management ExxonMobil, GE management Strategic control IBM, Samsung Coordinating business units BP, P&G Managing acquisitions Citigroup, Cisco MIS Speed and responsiveness through Wal-Mart, Dell, rapid information transfer Capital One R&D Research capability Merck, IBM Development of innovative new products Apple, 3M Manufacturing Efficient volume manufacturing Briggs & Stratton Continuous Improvement Nucor, Harley-D Flexibility Zara, Four Seasons Design Design capability Apple, Nokia Marketing Brand management P&G, LVMH, Coke Quality reputation Johnson & Johnson Responsiveness to market trends MTV, L’Oreal Sales, distribution Sales responsiveness PepsiCo, Pfizer & service Efficiency and speed of distribution LL Bean, Dell Customer Service Singapore Airlines Caterpillar Grant 2007
Direct or indirect sales of services or products in foreign market from home market.
Arrangement where firm (licensor) grants to independent foreign firm (licensee) rights of intangible assets (patents, trade secrets, know-how, trade marks, or company name) to produce firm's product or service in their country for negotiated fee - normally royalty payments on number of units sold.
Specialized form of licensing in which firm (franchisor) licenses business system as well as other property rights to franchisee. Franchisor licenses way of organizing and conducting a business under its trade name and in return, the franchisor receives fees, running royalties, and other compensations from franchisee.
Firm agrees to handle every detail of project for foreign client, including training of personnel, and at completion “hands over key” to foreign client.
International firm shares in ownership of an enterprise in target country. Most commonly, international firm agrees to share capital and other resources with another local firm.
Wholly owned subsidiary
Firm acquires 100 percent of firm or sets up own through greenfield.
A hierarchical model of entry choice modes Adapted from Y. Pan & D. Tse, 2000, The hierarchical model of market entry modes (p. 538), Journal of International Business Studies , 31: 535–554. Commitment
Usually one of several options for pursuing a strategic goal (eg product exchange, learning, market positioning) - never an end in itself
Alternatives to collaboration: self-sufficiency, buying inputs or skills, full acquisition
Knowing how to maximize benefits and minimize risks of partnerships
Complementary needs and resources/capabilities
Access to market
Choosing organizational forms that provide incentives for success
Contracts vs. equity relationships
SUZUKI ISUZU TOYOTA IBC Vehicles Ltd. (U.K.) GM New United Motor Manufacturing Inc. (NUMMI) 10% owned. Co-production 49%owned. Co-production 40% investment 60% owned 50% owned 50% owned (Makes vans in UK) (Makes cars in US) SAAB 50% owned FIAT 20% owned (2000-5). Collaboration on technology and components FUJI 20% owned; joint production DAEWOO 50.9% owned; technical & production collaboration AVTOVAZ Russian JV to produce cars SAIC JV to produce cars in China General Motors ’ alliances with competitors Grant 2007
Firm enters foreign market before other foreign firms
First mover advantage
Ability to preempt rivals & capture demand by establishing strong brand name
Build sales volume and ride down experience curve with cost advantage
Create switching cost that tie customers into products & services
First mover disadvantages - Pioneering costs
Time & effort in learning rules
Mistakes due to ignorance
Liability of being foreigner
Costs of promoting & establishing product – educating customers (KFC in China -> benefit to McDonald’s)
Adapted from Delfmann
Dynamics of internationalization Ongoing assessment of trade-offs and resources and capabilities Ongoing evaluation of national and industry environments Decision to increase internationalization involvement
Sölvell, Ö. The Radio Model, Stockholm School of Economics, 2007.
Teigland, R., Fad or Future: What do virtual worlds have to offer?, www.slideshare.net/eteigland/, 2008.
Thanks and see you in world! Karinda Rhode aka Robin Teigland [email_address] www.knowledgenetworking.org www.slideshare.net/eteigland
Measurement GEB 6365 THE INTERNATIONAL MARKETING RESEARCH PROCESS FIRM OBJECTIVE INFORMATION REQUIREMENT PROBLEM DEFINITION CHOOSE UNIT OF ANALYSIS EXAMINE DATA AVAILABILTY Can Secondary Data be Used? ASSESS VALUE OF RESEARCH RESEARCH DESIGN DATA ANALYSIS INTERPRETATION/ PRESENTATION Firm’s Needs Market Orientation Strategic Orientation Problem Orientation Self Reference Criterion Country Region Global Subgroup/Segments Within Countries Cost/ Benefit Analysis Causal Descriptive Exploratory Data Preparation Data Manipulation T-tests & Cross TAbs Experimental Design & ANOVA Multivariate Techniques Advantages / Disadavantages of Secondary Research Sources of Secondary Data Types of Problems That CAn be Solved Using Secondary Data Frequency & Ease of Use Issues in Primary Data Collection Qualitative Methodsi Surveys Instrument Design Scale Development Sampling Types Sources of Bias Country/ Regional Specific Bias Equivalence Coding Wording Format Construct Sampling Analysis Yes No